Remembering Jim Buchanan

Karen I. Vaughn

Published online: 28 January 2014# Springer Science+Business Media New York 2014

Abstract James Buchanan was an important influence on the Austrian revivaland not incidentally on my own career. By taking the work of Ludwig vonMises, Friedrich Hayek and Israel Kirzner seriously at a time when Austrianeconomics was ignored by the economics profession and by making his owncontributions to subjectivist economics, Buchanan helped make the Austrianperspective professionally respectable, and inspired a generation of youngeconomists interested in the Austrian school.

Keywords Austrian economics . GeorgeMasonUniversity . Center for the study ofmarket processes

JEL Classification B10History of Economic Thought

I first became aware of James Buchanan sometime in 1974. At that time, I was still atthe University of Tennessee, languishing in an uninspiring environment and seriouslydoubting my choice of career. I had managed to get through graduate school withreasonable research skills but without learning anything about how to be a professionalacademic. I excelled at microeconomic theory, but it was only when I managed to workmy way through Alchian and Allen’s University Economics the previous year that Ifinally began to get a grasp of what it meant to think like an economist. As anundergraduate at Queens College in New York City, I had been introduced to MurrayRothbard and the Austrian school by my classmate, Larry Moss, but at the time, all Icould appreciate was its libertarian implications: I hadn’t a clue as to why Mises wasdifferent from Milton Friedman. Even attending the now famous conference onAustrian economics at South Royalton, VT. in 1974 had left me with more questionsthan answers.1 All that changed, however, when my friend and colleague, Larry Moss,

Rev Austrian Econ (2014) 27:157–164DOI 10.1007/s11138-014-0262-z

1For an account of the conference on Austrian economics, see (Vaughn 1994a, b, 103–111.)

K. I. Vaughn (*)George Mason University, Fairfax, VA, USAe-mail: kvaughn@gmu.edu

asked me to be the sole discussant on a panel he was organizing for the SouthernEconomic Association meetings that fall on the subject of “Ludwig von Mises:Towards a Critical Reappraisal.”2

As I said, at this point in my life I was an Austrian neophyte. The idea of discussingfour papers evaluating Mises’s work was daunting to say the least. From my earlierreadings, and from the account of Austrian ideas I had heard at South Royalton thatsummer, I had had at least had some exposure to the topics of three of the papers on thesession: Moss on monetary theory, William Baumgarten on Mises’s liberalism andIsrael Kirzner on Austrian capital theory. But when it came to the fourth one, MurrayRothbard on the economic calculation debate, I knew exactly nothing. I had never evenheard of the debate. Fortunately, my Duke background in history of thought researchcame to the rescue, and my ignorance was dispelled by my reading not only Rothbard’spaper, but also every one of the papers he referred to in his essay. I became intrigued bythe economic calculation debate and then read the references to the references.

One of the pieces Rothbard referred to happened to be Buchanan’s introduction toLSE Essays on Cost (Buchanan and Thirlby 1973) that had just been published the yearbefore. I don’t know if I had heard of Jim before that. I think he had come to Duke as aspeaker when I was in graduate school, but I have no memory of what he said or evenwho he was. But the essays on cost were a revelation to me. I was so intrigued by hisshort discussion of the subjective cost tradition at the London School of Economics inthe 1930’s and 1940’s that I read all of the essays in the book including Hayek’s“Economics and Knowledge”—my first real introduction to Hayek’s work. From there,I went on to read Cost and Choice (Buchanan 1969) and emerged a major fan of JamesBuchanan. At the time, it was clearly the most intriguing book on an economics topicthat I had ever read.

There were a number of reasons why I found Cost and Choice so intriguing. Therewas a depth to the discussion that seemed to me to be missing in most economicwriting. Buchanan was addressing foundational issues that put the whole corpus ofconventional microeconomic theory and especially its manifestation in welfare eco-nomics in doubt. I didn’t know exactly what to make of it at the time, but I knew hisarguments deserved serious consideration. Indeed, I puzzled over it for several yearsbefore I felt I truly understood his argument. Yet, for me, equally important wereBuchanan’s references to the Austrians. With the South Royalton conference so fresh inmy mind, I was excited that Buchanan was treating Austrian arguments seriouslywithout calling himself an Austrian. As attracted as I was to the Austrian defense ofthe market economy, I was put off by what seemed to me to be a demand for doctrinalpurity rather than open argument. Rothbard encouraged that attitude among his fol-lowers, and that made me wary of him and his ideas. Yet here was James Buchanan,Chicago trained, part of what I then thought of as the mainstream, agreeing that Misesand Hayek had something important to say. At the very least, it gave me confidence topursue an Austrian approach to economic understanding—somehow, Buchanan con-ferred legitimacy on the project.

I met Buchanan personally for the first time in 1975 at a Liberty Fund conference inAthens, Ohio, but I was too star-struck to say anything more than, “Prof. Buchanan, I

2 The proceedings of the session were published by the Institute for Humane Studies with an introduction byFritz Machlup who had served as session chair (Moss 1976).

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loved Cost and Choice” to which he grumbled a quick thank-you and turned to talk tosomeone else. (I took his behavior as a rebuff and only later came to understand howshy he could be with people he did not know.) A year and a half later, however, I wasinvited to give a talk at the Public Choice Center at Virginia Tech, and during a dinnerat Dick and Barbara Wagner’s home afterwards, I got to talk to my idol and discoverhow approachable he really was. Then, in the summer, 1977, Jim invited me to a 10 dayLiberty Fund conference in Blacksburg that changed my working life. Jim had per-suaded Liberty Fund to support a summer version of the old Volker Fund Lectures thathe and Warren Nutter had instituted at the University of Virginia during the 1960’s. Thefirst one, held in Blacksburg, featured lectures by Robert Nozick, Buchanan andGordon Tullock sharing a slot, and Charles Plott. The conference was such a successthat the series continued every summer into the late 1980’s taking place in Fairfax afterthe Center’s move to George Mason University. I attended all but one of them and afterthe move to Fairfax, served as their discussion leader.

It is hard for me now to recall the details of all those wonderful conferences. Thespeakers were all people whom Jim found interesting, which is to say, some of the mostinteresting people in the world of ideas. I would come away from them every summerwith new books to read, new ideas to consider, and renewed confidence that I hadsomething to contribute to the profession. I have Jim to thank for that. He created anatmosphere at those conferences that existed no where else in academia: Jim regardedeveryone around the table as an equal no matter one’s age or status in the profession.All ideas were open to criticism, all comments could be debated no matter who offeredthem. While this might seem a strange comment, there were no politics around thattable. Each person counted for one and no one’s ideas or comments were privilegedover anyone else’s. Even more important for a young academic, as I was in those days,was the realization that what I had to say actually might matter to someone of fargreater stature than myself. I found an excitement about ideas that I had missed ingraduate school and at my first job. In an important way, attendance at that firstBlacksburg conference marked the beginning of my academic career.

In 1978 I began teaching at George Mason (with the help of Jim Buchanan who putin a good word for me with William Snavely, the department chairman, before myinterview in December of the previous year) and shortly thereafter, I published my firsttwo real journal articles, one on the economic calculation debate (Vaughn 1980a) andthe other on subjective cost (Vaughn 1980b), both topics greatly influenced by myreading of Buchanan.3 My academic life was off to a belatedly good start, but I nevercould have imagined that it could get so much better, that instead of having to travel toBlacksburg every summer to get my fix of new ideas, Blacksburg, so to speak, wouldinstead come to me.

1 The move to Fairfax

In order to understand just what the coming of the Public Choice Center meant toGeorge Mason University, it is necessary to describe what the department and the

3 In fact, Israel Kirzner once commented that my reading of the calculation debate was perhaps too colored byBuchanan’s notion of the role of subjective cost. In retrospect, Kirzner had a point.

Remembering Jim Buchanan 159

school itself was like circa 1981. George Mason was small, poor and spectacularlyundistinguished. A relatively new creation of the Virginia system, it had little going forit except for location and a president, George Johnson, with high aspirations—aspira-tions that often caused him to run afoul of a State Board of Higher Education that washeavily weighted in favor of the more famous down-state schools, the University ofVirginia, and Virginia Tech. The economics department, then somewhere around 18faculty, was mostly very young and not highly represented in academic journals Wehad been strongly encouraged by the administration to institute a Ph.D. program thatwas to begin in 1982 despite the fact that only two people on our faculty at the time,James Bennett and William Snavely, had ever even served on a Ph.D. disser-tation committee. From my perspective, we had exactly one claim to distinc-tion: a newly organized program on Austrian economics that we called theCenter for the Study of Market Processes.4 Apparently, Jim Buchanan sharedmy view of the Center because it’s existence was an important factor contrib-uting to his decision to move to GMU.

I’ve told the story about how that move came about many times. Perhaps it is time toimmortalize it in print. It was at the Public Choice cocktail party at the AEA meetingsin December of 1981 that Jim told me how difficult things were getting for his programat Virginia Tech. He was concerned that the economics department was getting tooconventional and hiring too many people trained in mathematics but with little appre-ciation of economic reasoning. Jim’s advice to academics was always “Dare to bedifferent,” and Virginia Tech was falling short in his opinion. Worse, it had anadministration that backed up the department chairman in his striving to make theeconomics department more conventional. In the course of our conversation, Jim saidto me, “If things keep going the way they are now, we might have to just move in withyou in Fairfax!” I wish I could say I immediately jumped at the suggestion and eagerlystarted to outline the benefits of such a move. The truth is that I just didn’t think hecould be serious. I laughed, said something like “yeah, sure” or something else equallyinane and moved on to other topics. It was only a week or two later when discussingBuchanan’s comment with Jim Bennett that I started to think it was worth pursuing.The next week I flew to Blacksburg where I began selling the potential virtues of GMUto a very skeptical Public Choice Center faculty. My argument was basically this: GMUis young, the economics department will have a brand new Ph.D. program and noentrenched interest groups to oppose the Public Choice agenda, the Center would be avery big fish in a very little pond, and they could pretty much run the place if they sochose. Those arguments seemed to resonate with Jim, because he took my visit very

4 The story of how the Market Processes Center came to George Mason University is another that needs to betold, but I offer only an abbreviated version here. In a phone conversation I had with George Pearson, thenwith the Institute fof Humane Studies, George mentioned that the Austrian Program currently at RutgersUniversity, Newark was having difficulty getting faculty approval to hire Austrian trained professors andwould like to relocate. As I sat in my basement office in an old and crumbling house off campus watchingbugs crawl under the door to get in out of the rain, I said flippantly, “send them here—God knows there isnothing else going on in this place.” After continuing discussing the possibilities in a more serious vein,George immediately had Richard Fink contact me, where upon I talked to our chairman, Bill Snavely whoarranged for Rich to interview at GMU. Bill was impressed with Rich’s enthusiasm and drive as well as hispromise to raise outside funding for the department. Consequently, he was hired and joined the faculty in1980. He was followed by Don Lavoie and Jack High in 1981. With four of us as core faculty, we were able toorganize the Center for the Study of Market Processes.

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seriously: he later said he was impressed by how quickly I tried to recruit him after acasual comment at a cocktail party!

The next step was to consult the administration to see if bringing Buchananto GMU was even feasible. To George Johnson’s everlasting credit, he imme-diately saw opportunity instead of obstacles. Jim came to Fairfax to discusspossibilities with the administration, then each of the seven members of thecenter came to check us out. After a series of tough negotiations and apresentation to the Board of Visitors which had to approve the move, in, Ithink, May of 1982, the Memorandum of Understanding between the JamesBuchanan as Director of the Center for Study of Public Choice and GeorgeJohnston, President of GMU, was signed. The Memorandum listed who wouldcome, at what rank, what teaching responsibilities, location of the Center, howexternal funds would be handled, and a host of other details that in honorbound both parties to the deal before any official hiring could take place. Themove was phased over 2 years with Mark Crain coming up in the Fall of 1982to serve as graduate coordinator for the department and the rest of the Centerarriving in the summer of 1983. Largely because of my role in brokering thedeal, I was asked to serve as department chairman primarily to smooth thetransition. Unfortunately, at Jim’s behest, I kept that position until 1989 when Ifinally decided I had had enough of administration to last a lifetime, as itseemed to me it already had.

2 Impact on Austrian economics

It might seem odd to claim that the existence of the Center for the Study ofMarket Processes had any influence over Jim’s decision to move the PublicChoice Center to GMU. After all, Austrian economics was not exactly in theforefront of academic life, and the Market Process Center consisted of onetenured associate professor, two brand new assistants and one assistant who hadyet to finish his dissertation. Yet the presence of the Market Processes Centerwas an important signal to Jim that GMU was a place that he would findcongenial to his way of thinking.

At least from the time of his Presidential Address to the Southern EconomicAssociation in 1962 (Buchanan 1963), it is clear that Jim had an affinity for manyAustrian ideas. In that address he called for treating economics as a science of exchangerather than of choice, argued that exchange can only be viewed as a process leading tothe establishment of institutions to channel behavior, stated categorically that there is nosuch thing as aggregate economic inefficiency and in general criticized almost theentire corpus of contemporary welfare theory. It is clear that he had read Mises, Hayekand Kirzner all of whom he later cited respectfully if not uncritically in Cost andChoice. Equally telling of his affinity for the Austrians is an address he gave to a jointLiberty Fund—Institute for Humane Studies conference on subjectivism in 1976. Thetitle was “General Implications of Subjectivism,” (Buchanan 1979) in which he praisedthe subjectivist approach for being best able to explain spontaneous order, the centralproblem of economics. While his address was not simply laudatory—in particular,he criticized some Austrians for acting too much like a priesthood with

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unchallengeable doctrines—the general tenor of his address was that the subjectiv-ists were definitely on the right track.5 I think more than anything, he liked thefact that there were so many people in the audience (I don’t remember exactnumbers but a hotel ballroom was filled with participants) eager to challenge thestatus quo in the profession, especially so many young, well-trained but alsocreative economists with a passion for ideas. So, I guess it is not completelyinexplicable that in 1981 when he was considering his options at Virginia Tech, amove to GMU was considered a possibility. We market process people may havebeen young and few in number, but it was likely that we would be interesting totalk to.6 What he might not have anticipated is just how much his move to GMUwould enhance the reputation and reach of Austrian ideas.

Buchanan and the Public Choice Center, by their move in 1983, granted ourdepartment instant credibility. The addition of seven highly acclaimed and well-published scholars made our unknown department at an unknown school at oncevisible in the profession. And our Ph.D. program became not only instantly respectable,but even more, it became desirable to interesting prospective graduate students. Theinitial intention for our Ph.D was to offer a program that would be attractive toWashington policy types who wanted to get a graduate degree while still workingdowntown. Hence all of our graduate courses were taught in the evening. With thecoming of the Public Choice Center, we attracted enough full time students to run amore academically oriented program, and more to the point, we attracted students whowere interested in ideas as much as careers.

Jim himself would acknowledge that over the years, some of the best of our studentscame not primarily to study public choice but to pursue their interest in Austrianeconomics. For the first time in decades, students could study the Austrian traditionin a program that was both distinguished and sympathetic to their ideas.7 While noteveryone in the Public Choice Center was a fan of the Austrians, we all agreed on thecentral importance of markets to human welfare. Further, where there were methodo-logical differences, Buchanan set an example of open yet respectful debate. 8 Especiallyin the pre-Nobel Prize days, Jim participated fully and enthusiastically in seminars,invited private discussion with faculty and students, and generally became an intellec-tual force to be reckoned with in both Centers.

5 I attended that conference, and what I remember most was the feeling of exhilaration that followed from atalk by someone outside the Austrian club who was nevertheless validating Austrian ideas. If I had been on thefence before about my attitude toward Austrian economics, Buchanan clearly pushed me in the direction of theAustrians with that talk.6 It was reported to me by Viktor Vanberg that Jim especially liked the fact that we called ourselves the Centerfor Study of Market Processes rather than Program in Austrian Economics. He felt it was important to focus ona research question rather than on a particular ancestry, a position with which I heartily concurred.7 Obviously, New York University is distinguished, but no one to my knowledge would call the economicsfaculty friendly to Austrian ideas.8 I should point out that the integration of the Public Choice Center in our department was not all smoothsailing. As with any business merger, when two cultures come in contact, it is almost inevitable that therewould be disagreements and more than a few misunderstandings. Jim was not always an easy person withwhom to work. Trying to smooth over the difficulties while seeing to my administrative duties and still tryingto keep up a research agenda was a challenge for me discussion of which would be inappropriate in this essay.Nevertheless, despite the difficulties and the usual politics and intrigues that are found in every academicenvironment, George Mason University’s department of economics was an exciting and invigorating place tobe. After 1982, I never thought of leaving because I couldn’t imagine any place I would rather ply my trade.

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One needs to ask our early students themselves what this environment meant forthem, but I conjecture that it allowed them freedom to explore ideas within the contextof solid professional training, and it gave them the confidence that they had somethingto contribute to the profession in much the same way that those Blacksburg LibertyFund conferences encouraged me some years earlier. And, let us not forget, it helpedour students to get jobs—a necessary condition for any serious pursuit of higherthoughts!

Now, 30 years after the advent of Buchanan and the Public Choice center to GMU,our Austrian students are teaching in good programs both nationally and internation-ally. They are making a mark on the profession as they continue to work in the Austriantradition and, often, they are instituting Austrian friendly programs of their own in theiruniversities. It is almost inconceivable that any such professional success with Austrianideas could have come about without the program at GMU or the support of JamesBuchanan.

3 Conclusion

Let me end this with a very personal note. In most important respects, my career wasshaped by my interactions with Jim Buchanan. From my first reading of Cost andChoice, through all the Liberty Fund conferences we attended together and finally ashis colleague at George Mason University, Jim’s ideas were the load star from which Ioriented my own thinking. I didn’t always agree with him, and in fact I had seriousreservations about aspects of his constitutional project.9 Over time, I became muchmore of a Hayekian than a Buchanian (if such a word is possible in the Englishlanguage), but every argument I made was informed in some way by discussions orarguments with Jim or by my reading of his work. I almost always had in the back ofmy mind some idea of his I wanted either to support or challenge. I suppose that is themark of true intellectual engagement. I know many others could say the same thingabout their relationship to Jim Buchanan. He was a force, a presence that could not beignored, and we were all better for that.

References

Buchanan, J. M. (1963). What should economists do. Southern Economic Journal, 30, 213–222.Buchanan, J. M. (1969). Cost and choice. Chicago: Markham Publ. Co.Buchanan, J. M. (1979). What should economists do (pp. 81–92). Indianapolis: Liberty Press.Buchanan, J. M., & Thirlby, G. F. (1973). L.S.E essays on cost. Birkenhead: London School of Economics.

9 Ironically, my reservations about Buchanan’s constitutional project came about through an essay I wrote athis encouragement. In 1982, at Buchanan’s urging, I submitted a paper entitled “Can Democratic SocietiesReform Themselves: the limits of constructive change” (Vaughn 1994b) to a prize essay contest sponsored bythe Mont Pelerin Society. In it, I contrasted Buchanan’s constitutional economics with Hayek’s evolutionarytheory of social change, and even though my argument was more in line with Hayek than Buchanan, Jim wasvery supportive as were the contest judges. I won the prize and was later invited to join the Society. Inretrospect, I see that ideas I introduced in that essay became integral to most of my subsequent writing. It ishumbling to think that I probably would not have written that paper if Buchanan hadn’t keptprodding me to do so.

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Moss, L. S. (1976). The economics of Ludwig von Mises: Toward a critical reappraisal. Kansas City: Sheedand Ward.

Vaughn, K. I. (1980a). Economics calculation under socialism: the Austrian contribution. Economic Inquiry,XVII, 535–554.

Vaughn, K. I. (1980b). Does it matter that costs are subjective. Southern Economic Journal, 46, 702–715.Vaughn, K. I. (1994a). Austrian economics in America: The migration of a tradition. Cambridge: Cambridge

University Press.Vaughn, K. I. (1994b). In P. J. Boettke & D. L. Prychitko (Eds.), Can democratic society reform itself: The

limits of constructive change (pp. 229–243). Hants: Edward Elgar.

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